Oil Prices

As oil prices creep back over $4 a gallon, we look at the underlying reasons for this unexpected increase.

Just as shippers are getting a pleasant New Year’s present with lower fuel surcharges in the wake of plunging diesel fuel prices, here comes a warning to not get used to it.

According to Goldman Sachs, prior to the Israeli attacks, Iran had raised its oil production by around 500,000 barrels a day. Goldman Sachs estimated for every 100,000 barrel a day decline in Iran’s production next year, Brent crude oil prices would rise by about $1 per barrel.

This objective laid out by the ATA’s top executive is very timely, considering that the national average price per gallon, for diesel gasoline, has topped the $4 mark over the last few weeks, coupled with both WTI and Brent Crude prices seeing steep increases over the same period, too, due, in large part to the Russia-Ukraine conflict.

A shift to goods consumption has wreaked havoc on supply chains and contributed to goods price inflation.

​In case you haven’t noticed, crude oil prices are rising and taking the cost of diesel with them. If you’re a shipper, you’ve probably noticed your weekly fuel surcharge is also rising as diesel hits $3 in parts of the country.

Now more than ever, business leaders should be planning for the worst, and hoping for the best.

Oil prices will continue to face upward pressure, and—perhaps even more importantly—oil prices will become even more sensitive to geopolitical disruptions. Oil and Gas Trends 2018, Energy Prices 2018, Supply Chain Fuel rates, Trucking Fuel

Trade and transport analysts see a turnaround in last year’s negative market outlook, but as global GDP continues to gradually strengthen, carriers in all modes will be challenged to manage capacity while maintaining service levels. Furthermore, sudden shifts in trade policies and agreements may also have an impact on rates.

Over the last 20 years, the volume of oil consumed per unit of real GDP has contracted on a very consistent basis; consequently, the global economy could grow at more than 2% per year without oil demand rising. Meanwhile shale oil producers—the world’s swing producers—are increasing well productivity at double-digit rates.

Oil prices fell again today, erasing early gains and dragging U.S. crude below $40 a barrel as persistent worries of a glut offset the boost from a weak dollar early in the session.

Google is kind enough to aggregate all the oil news stories of the day and send them to me in an e-mail. And as part of my morning routine, I read all the headlines and click through to dig more deeply into those that promise to bring new insight.

If it feels like global oil and fuel markets are in a constant state of turmoil—it’s because they are. And as we enter 2016, markets could not be more unstable.

In the 1970s, legislation was enacted banning the export of domestic crude oil without a special license—and unless Canada is the destination, export licenses are nearly impossible for domestic producers to acquire. With the growing oil glut, the time to lift the ban has come.